The Uniform Law Commission is a non-profit, unincorporated association that researches, drafts, and promotes enactment of US legislation in areas of state law where uniformity is desirable and practical. In 2013, the ULC appointed a committee, called the Revisions to the Uniform Unclaimed Property Act committee or “RUUPA” committee, which over the past few years has gathered written and oral testimony, and held public meetings in regard to amending the existing Uniform Unclaimed Property Act which has been in place since 1995.
In July 2016, the ULC voted favorably on revisions put forth to the Uniform Unclaimed Property Act. When the majority of state legislatures open sessions in late winter or early spring, 2017, the RUUPA may be introduced for consideration either in whole or in part.
Here are the highlights of the approved revisions:
Statute of Limitations and Repose
The RUUPA includes a statute of limitations stating that the Unclaimed Property Administrator can’t bring an action to enforce the Act relating to reporting, payment or delivery of property five (5) years after the business filed a non-fraudulent report. Further, the administrator cannot bring an action or examine a holder related to a duty under the RUUPA more than 10 years after the duty arose.
Record Retention Period
A record retention period of 10 years after the unclaimed property report was filed or should have been filed is included in the RUUPA.
To make unclaimed property audits more transparent, the RUUPA requires that the administrator follow the state’s procurement law in hiring contract auditors, provide the business to be examined with a confidentiality agreement, and provides for an informal conference with the administrator and an administrative appeal provision. Plus, the administrator is required to provide a report annually to the legislature/governor regarding the revenues received from audit (by contract auditor) and the claims paid and denied.
Electronic Due Diligence
Notices to owners of property about to be escheated will still have to be sent via US mail but also must be sent to the owner by electronic mail if the owner has previously consented to receiving notifications in this manner. Under the RUUPA, such notices must be sent within 60 to 180 days prior to the reporting deadline.
State Sale of Remitted Securities and Claimant Payment
Under the RUUPA, a state administrator is restricted from selling securities within three (3) years after receipt by the state and the state has given notice to the owner. If the administrator sells the securities within six (6) years after they have been delivered to the state and a valid claim is made within the time, the claimant is entitled to receive replacement shares and accrued dividends and other property that may be the result of stock splits or corporate actions.
Pay Cards Dormancy Period
Different from wages, salary or payroll paid via check which are assigned a one (1) year dormancy period, outstanding balances on pay card accounts are assigned a three (3) year dormancy period.
Securities Dormancy Period Trigger
The trigger for initiating a three (3) year dormancy period for securities is a second consecutive returned communication that was sent via first class US mail to the owner. If the owner doesn’t receive communication from the holder via US mail, the holder is required to confirm the owner’s interest by sending an electronic mail communication within 2 years after the owner’s last indication of interest in the property. If no response is received to the electronic mail or the holder is notified that the electronic mail was not received, the holder must attempt to contact the owner via US mail and the three (3) dormancy period would be triggered and begin to run after that US mail is returned as undeliverable.
Gift Card and Business to Business Exemptions
While almost two thirds of the states have unclaimed property laws that exempt gift cards from the law under certain conditions, the RUUPA makes such an exemption optional for state legislatures that choose to adopt the RUUPA. Further, while about one third of the state unclaimed property laws exempt specific types of credits that occur between businesses, the RUUPA does not include such a provision nor does it make mention of making it optional.